Friday, November 9, 2012

2013 Budget Bullet points by LOLC STOCK BROKERS

·         Offer a 3 year half tax holiday for new companies that will be listed in the Colombo Stock Exchange before December 2013, and maintain a minimum of 20 percent of its shares with the public.

·         Exempt withholding tax on interest income earned from investing in bonds and debentures listed in the Colombo Stock Exchange.

·         Allow direct investments in foreign currencies in Unit Trusts without having to channel through Securities Investment Account (SIA).

·         Apply the 10 percent tax applicable to Unit Trusts also to Unit Trust Management companies in order to strengthen the management of Unit Trusts.

·         Exempt transfer of shares for margin trading from Stamp Duty

·         Raise the re-insurance premium charged by the National Insurance Trust Fund from 20 percent to 30 percent and transfer the entire amount to set up a separate re-insurance fund to meet reinsurance requirements of Sri Lanka's insurance industry

·         Allow corporate entities to borrow up to US$ 10 million per annum over a next 3 years without having to obtain Exchange Control Department approval.

·         Permit licensed commercial banks to borrow up to US$ 50 million each year for three years without the approval from Exchange Control Department.

·         Encourage the DFCC Bank and the NDB Bank to raise over 10 year tenure long term foreign development finance up to US$ 250 million each, to provide long term funding for SMEs, plantations, the construction industry and other manufacturing industries. Government will underwrite the exchange risks of such borrowings. Interest income from such lendings will be exempted from income taxes. Government will also facilitate such borrowings by floating domestic bonds, enabling these two institutions to invest their surplus funds until loan proceeds are fully utilized. This will enable domestic entrepreneurs to borrow long term funds at low interest rates to meet their funding requirements.

·         Extend the coverage of NBT and VAT taxes to  supermarkets and large scale trading operations generating a quarterly turnover in excess of Rs. 500 million.

·         Raise the Airport Tax by US$ 10 and the Online Visa Fee by US$ 5 from January 2013.

·         Increase duties by 10- 20 percent on all vehicles imported under concessional schemes.

·         Increase the registration fees on betting businesses to Rs. 2 million and on gaming activities to Rs. 100 million. Impose a 5 percent tax on the turnover of a gaming business. The highest income tax rate of 40 percent will be maintained for profit of such businesses.

·         Raise the duty imposed on imported liquor and sprits by 25 percent.

·         Banking, finance and insurance institutions to pay a levy of 1 percent from their annual profits to the National Insurance Trust Fund, to liabilities of draught casualties.

·         Exempt solar power systems and such other renewable energy equipment which are not manufactured in Sri Lanka from taxes imposed at the point of imports and to reduce Income Tax on such projects to 12 percent.

·         Exempt income from energy crops such as Gliricidia cultivation particularly in coconut estates for a period of 10 years, since such crops provide a good source of energy.

·         Grant a lump sum depreciation on capital assets used to generate renewable energy for industries, provided at least 30 percent of the related energy requirement is generated through renewable sources.

·         Make a capital contribution of Rs. 500 million to expand the Lak Sathosa retail network up to 1,000 outlets over next 3 years. A branch of Osu-Sala will also be setup in every Lak Sathosa retail shop to provide essential drugs at affordable prices.

·         The National Milk Board and MILCO will also expand their factory capacity at Digana, Polonnaruwa and Ambewela to increase fresh milk production and dairy products at a cost of around US$ 40 million.

·         Reduce income tax on poultry industry to 10 percent.

·         Reduce increase the replanting subsidy from Rs. 300,000 to Rs. 350,000 per hectare from 2013 to encourage replanting among small holders. Increase the subsidy for new plantation from Rs. 150,000 to Rs. 250,000 per hectare. provide Rs. 100 million

·         Reduce income tax on the export of tea to 12 percent provided such exports are made out of organic tea.

·         Exempt go-carts and specially designed racing vehicles from the applicability of the Special Excise Provision Act

source - LOLC Stock Brokers

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